FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1998
                           --------------------------

                                       OR

             ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the transition period from to


                             Commission file number
                                     0-21558


                            CNL Income Fund XII, Ltd.
             (Exact name of registrant as specified in its charter)


          Florida                       59-3078856
(State or other jurisdiction            (I.R.S. Employer
of incorporation or organiza-           Identification No.)
tion)


400 E. South Street
Orlando, Florida                               32801
----------------------------             -----------------
(Address of principal                       (Zip Code)
executive offices)


Registrant's telephone number
(including area code)                     (407) 422-1574


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.   Yes     X      No


<PAGE>









                                    CONTENTS






Part I                                                             Page

  Item 1.  Financial Statements:

             Condensed Balance Sheets                              1

             Condensed Statements of Income                        2

             Condensed Statements of Partners' Capital             3

             Condensed Statements of Cash Flows                    4

             Notes to Condensed Financial Statements               5

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and
             Results of Operations                                 6-7


Part II

  Other Information                                                8


<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS


                                          March 31,              December 31,
            ASSETS                          1998                     1997
                                         -----------             -----------

Land and buildings on operating
  leases, less accumulated
  depreciation of $1,540,446 and
  $1,460,887                             $20,740,720              $20,820,279
Net investment in direct financing
  leases                                  13,613,631               13,656,265
Investment in joint ventures               2,520,871                2,517,421
Cash and cash equivalents                  1,876,590                1,706,415
Receivables, less allowance for
  doubtful accounts of $20,868 and
  $7,482                                     192,297                  202,472
Prepaid expenses                              11,274                    7,216
Lease costs, less accumulated
  amortization of $1,742 and $1,307           27,811                   24,746
Accrued rental income                      2,587,680                2,496,176
                                         -----------              -----------

                                         $41,570,874              $41,430,990
                                         ===========              ===========


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                         $     5,195              $    10,558
Escrowed real estate taxes payable             7,691                    3,244
Distributions payable                        956,252                  956,252
Due to related parties                         8,529                    6,887
Rents paid in advance and deposits           173,844                   36,737
                                         -----------              -----------
    Total liabilities                      1,151,511                1,013,678

Partners' capital                         40,419,363               40,417,312
                                         -----------              -----------

                                         $41,570,874              $41,430,990
                                         ===========              ===========



            See accompanying notes to condensed financial statements.

                                        1

<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME


                                                      Quarter Ended
                                                         March 31,
                                               1998                 1997
                                            ----------           -----------

Revenues:
  Rental income from operating leases       $  626,546           $  603,795
  Earned income from direct financing
    leases                                     407,674              410,967
  Contingent rental income                       7,422                5,417
  Interest and other income                     15,252               20,797
                                            ----------           ----------
                                             1,056,894            1,040,976
                                            ----------           ----------

Expenses:
  General operating and administrative          34,465               38,722
  Professional services                         12,986                6,657
  Bad debt expense                               8,968                   -
  Management fees to related parties            10,580                9,913
  Real estate taxes                                 -                 1,410
  State and other taxes                         17,248               18,090
  Depreciation and amortization                 79,994               79,449
                                            ----------           ----------
                                               164,241              154,241
                                            ----------           ----------

Income Before Equity in Earnings of
  Joint Ventures                               892,653              886,735

Equity in Earnings of Joint Ventures            65,650               70,407
                                            ----------           ----------

Net Income                                  $  958,303           $  957,142
                                            ==========           ==========

Allocation of Net Income:
  General partners                          $    9,583           $    9,571
  Limited partners                             948,720              947,571
                                            ----------           ----------

                                            $  958,303           $  957,142
                                            ==========           ==========

Net Income Per Limited
  Partner Unit                              $     0.21           $     0.21
                                            ==========           ==========

Weighted Average Number
  of Limited Partner
  Units Outstanding                          4,500,000            4,500,000
                                            ==========           ==========









            See accompanying notes to condensed financial statements.

                                        2

<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL


                                        Quarter Ended              Year Ended
                                          March 31,               December 31,
                                            1998                      1997
                                        -------------             -----------

General partners:
  Beginning balance                      $   192,411               $   152,889
  Net income                                   9,583                    39,522
                                         -----------               -----------
                                             201,994                   192,411
                                         -----------               -----------

Limited partners:
  Beginning balance                       40,224,901                40,137,217
  Net income                                 948,720                 3,912,692
  Distributions ($0.21 and $0.85
    per limited partner unit,
    respectively)                           (956,252)               (3,825,008)
                                         -----------               -----------
                                          40,217,369                40,224,901
                                         -----------               -----------

Total partners' capital                  $40,419,363               $40,417,312
                                         ===========               ===========



            See accompanying notes to condensed financial statements.

                                        3

<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                        Quarter Ended
                                                          March 31,
                                                   1998            1997
                                               -----------      -----------

Increase in Cash and Cash Equivalents:

    Net Cash Provided by Operating
      Activities                               $ 1,129,927      $ 1,036,652
                                               -----------      -----------

    Cash Flows From Investing
      Activities:
        Collections on loan to tenant
          of joint venture                              -             2,059
        Payment of lease costs                      (3,500)              -
                                               -----------      ----------
            Net cash provided by (used
              in) investing activities              (3,500)           2,059
                                               -----------      -----------

    Cash Flows From Financing
      Activities:
        Distributions to limited
          partners                                (956,252)        (956,252)
                                               -----------      -----------
            Net cash used in
              financing activities                (956,252)        (956,252)
                                               -----------      -----------

Net Increase in Cash and Cash
  Equivalents                                      170,175           82,459

Cash and Cash Equivalents at
  Beginning of Quarter                           1,706,415        1,800,601
                                               -----------      -----------

Cash and Cash Equivalents at End of
  Quarter                                      $ 1,876,590      $ 1,883,060
                                               ===========      ===========

Supplemental Schedule of Non-Cash
  Financing Activities:

    Distributions declared and unpaid
      at end of quarter                        $   956,252      $   956,252
                                               ===========      ===========



            See accompanying notes to condensed financial statements.

                                        4

<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 1998 and 1997


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter ended March 31, 1998,  may not be indicative of the results
         that may be expected for the year ending December 31, 1998.  Amounts as
         of December 31, 1997, included in the financial  statements,  have been
         derived from audited financial statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XII, Ltd. (the  "Partnership")  for the year ended December
         31, 1997.

                                        5

<PAGE>



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

         CNL Income Fund XII,  Ltd.  (the  "Partnership")  is a Florida  limited
partnership  that was organized on August 20, 1991, to acquire for cash,  either
directly or through  joint  venture  arrangements,  both newly  constructed  and
existing  restaurants,  as well as properties upon which  restaurants were to be
constructed  (the  "Properties"),  which are leased  primarily  to  operators of
national and regional  fast-food and family-style  restaurant chains. The leases
are triple-net  leases,  with the lessees generally  responsible for all repairs
and maintenance,  property taxes, insurance and utilities. As of March 31, 1998,
the  Partnership  owned 48 Properties,  including  interests in four  Properties
owned by joint ventures in which the Partnership is a co-venturer.

Liquidity and Capital Resources

         The  Partnership's  primary  source of capital for the  quarters  ended
March 31, 1998 and 1997, was cash from operations  (which includes cash received
from tenants,  distributions from joint ventures,  and interest and other income
received, less cash paid for expenses).  Cash from operations was $1,129,927 and
$1,036,652  for the quarters  ended March 31, 1998 and 1997,  respectively.  The
increase in cash from  operations  for the  quarter  ended  March 31,  1998,  as
compared to the quarter  ended March 31, 1997,  is primarily a result of changes
in the Partnership's working capital.

         Currently,  rental income from the Partnership's Properties is invested
in money market accounts or other short-term,  highly liquid investments pending
the  Partnership's  use of such  funds to pay  Partnership  expenses  or to make
distributions to the partners. At March 31, 1998, the Partnership had $1,876,590
invested in such short-term  investments,  as compared to $1,706,415 at December
31, 1997. The increase in cash and cash  equivalents for the quarter ended March
31, 1998, is primarily  attributable  to an increase in rents paid in advance at
March 31, 1998, as compared to December 31, 1997.  The funds  remaining at March
31, 1998, after payment of distributions and other liabilities,  will be used to
meet the Partnership's working capital and other needs.

         Total  liabilities of the Partnership  increased to $1,151,511 at March
31, 1998,  from  $1,013,678 at December 31, 1997,  primarily as the result of an
increase  in rents paid in  advance  at March 31,  1998.  The  general  partners
believe that the  Partnership  has  sufficient  cash on hand to meet its current
working capital needs.

         Based on cash from operations,  the Partnership declared  distributions
to the limited  partners of $956,252  for each of the  quarters  ended March 31,
1998 and 1997. This  represents  distributions  for each  applicable  quarter of
$0.21 per unit.  No  distributions  were made to the  general  partners  for the
quarters  ended March 31, 1998 and 1997. No amounts  distributed  to the limited
partners for the quarters  ended March 31, 1998 and 1997,  are required to be or
have been treated by the Partnership as a

                                        6

<PAGE>



Liquidity and Capital Resources - Continued

return of capital for purposes of calculating  the limited  partners'  return on
their adjusted  capital  contributions.  The Partnership  intends to continue to
make distributions of cash available for distribution to the limited partners on
a quarterly basis.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

Results of Operations

         During the  quarters  ended  March 31, 1998 and 1997,  the  Partnership
owned and leased 44 wholly  owned  Properties  to  operators  of  fast-food  and
family-style  restaurant  chains. In connection  therewith,  during the quarters
ended March 31, 1998 and 1997, the Partnership earned $1,034,220 and $1,014,762,
respectively,  in rental  income from  operating  leases and earned  income from
direct financing leases from these Properties. The increase in rental and earned
income during the quarter ended March 31, 1998, as compared to the quarter ended
March 31,  1997,  is  primarily  attributable  to an increase  of  approximately
$18,800  as a result of the  Partnership  entering  into a new lease  with a new
tenant for the Property in Tempe,  Arizona,  for which rental payments commenced
in July 1997. For the quarters  ended March 31, 1998 and 1997,  the  Partnership
also earned $7,422 and $5,417, respectively, in contingent rental income.

         For the quarters ended March 31, 1998 and 1997, the  Partnership  owned
and leased four Properties  indirectly  through joint venture  arrangements.  In
connection  therewith,  during the quarters  ended March 31, 1998 and 1997,  the
Partnership earned $65,650 and $70,407, respectively, attributable to net income
earned by these joint ventures.

         Operating expenses,  including  depreciation and amortization  expense,
were  $164,241  and  $154,241  for the  quarters  ended March 31, 1998 and 1997,
respectively.  The increase in operating expenses during the quarter ended March
31,  1998,  as compared  to the  quarter  ended  March 31,  1997,  is  primarily
attributable to the fact that the Partnership recorded bad debt expense for past
due principal and interest  amounts  relating to the loan with the tenant of the
Property  in  Kingsville  Joint  Venture in  accordance  with the  Partnership's
policy. The general partners are in the process of negotiating an arrangement to
collect  past due  amounts.  The  Partnership  intends  to  continue  to  pursue
collection of past due amounts  relating to this Property and will recognize any
such amounts as income if collected.

                                        7

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                           PART II. OTHER INFORMATION


Item 1.           Legal Proceedings.  Inapplicable.

Item 2.           Changes in Securities.  Inapplicable.

Item 3.           Defaults upon Senior Securities.  Inapplicable.

Item 4.           Submission of Matters to a Vote of Security Holders.

                  Inapplicable.

Item 5.           Other Information.  Inapplicable.

Item 6.           Exhibits and Reports on Form 8-K.

                  (a)      Exhibits - None.

                  (b)      No reports on Form 8-K were filed  during the quarter
                           ended March 31, 1998.

                                        8

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 8th day of May, 1998.


                            CNL INCOME FUND XII, LTD.

                            By:      CNL REALTY CORPORATION
                                     General Partner


                                     By:      /s/ James M. Seneff, Jr.
                                              -----------------------------
                                              JAMES M. SENEFF, JR.
                                              Chief Executive Officer
                                              (Principal Executive Officer)


                                     By:      /s/ Robert A. Bourne
                                              -----------------------------
                                              ROBERT A. BOURNE
                                              President and Treasurer
                                              (Principal Financial and
                                              Accounting Officer)